World Energy Weekly Review - 25 August 2006
By EV World
With oil prices still in the $70 a barrel range, OPEC announced recently that it was going to carefully reduce oil prices in order to keep the world slipping in to a recession, the result of which would likely be a disastrous drop in oil prices, at least fro OPEC's perspective. As ODAC's Doug Low and EV World's discuss this week, their announcement had virtually no effect, dipping the price close to $70, but it has slow recovered since then. The reason appears to be that while Saudi Arabia -- now no longer the world's largest oil producer, replaced by Russia -- has spare production capacity, the oil is heavier, sour crude for which there is little market.
Russia continues to flex its energy muscles, threatening to cut off the flow of crude through a pipeline that supplies a refinery in Lithuania because the government there sold it to a Polish group instead of a Russian one. The natural gas situation in Ukraine continues to be worrisome as we close in on winter.
Meanwhile Italy is planning to be the LNG reception point for Europe, but the fly in their ointment is that all the liquefied natural gas in the world has already been contracted out until 2020.
Up in the UK, the government is warning that there might be shortages of gas there this winter, which could impact electric power production.
But turning to nuclear power may not be a solution as a report in Platts suggests. Despite growing momentum to build more plants, it appears that supply and expertise constraints may put a very real damper on the prospects of a nuclear power renaissance.
Finally, the group responsible for promoting tourism in Scotland has published a report that investigates the consequences of peak oil on tourism in the country, but without actually mentioning "peak oil."
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